Govt, auto industry move towards consensus on CAFE-III norms: Report

Senior government officials and representatives from the auto industry held a meeting to reach a consensus on the Corporate Average Fuel Efficiency (CAFE-III) norms, with sector stakeholders indicating their acceptance of the latest draft proposals, according to sources.

The meeting was called by the Bureau of Energy Efficiency under the Ministry of Power, and attended by secretaries from the Ministry of Road Transport & Highways(MoRTH), Ministry of Power (MoP) and Ministry of Heavy Industries (MHI), and auto industry stakeholders, including original equipment manufacturers (OEMs).

The meeting was held to gauge the views of stakeholders, especially automakers, over the draft rules before a final shape is given to them.

 

Differences had emerged among auto manufacturers over the draft rules, with small car makers arguing that leniency should be granted to them under the CAFE-III norms on the basis of weight and affordability, even as large OEMs were opposed to differential treatment, saying it would compromise safety features.

"The industry has more or less accepted the latest draft rules. The government officials told auto-makers that the motive behind drawing up the latest fuel efficiency norms is not to penalise them but to nudge them towards more fuel-efficient vehicles," sources close to the development said.

Therefore, automobile manufacturers were encouraged to explore multiple fuel options, including not only electric vehicles but also hybrids, flex fuels and compressed bio-gas, a source said.

Besides, auto-makers were asked to gear up for the new fuel efficiency rules, as the government is unlikely to defer the implementation of the CAFE-III norms, set to kick in from April 2027 and will be effective till March 31, 2032, they added.

The draft rules permit automobile makers that exceed emission reduction targets to trade surplus carbon credits with manufacturers that accumulate lesser carbon credits based on mutual agreement, moving away from penal provisions towards a framework that encourages compliance.

They also propose that original equipment manufacturers can offset any debit balance accumulated in their passbook through the purchase of credits from the Bureau of Energy Efficiency.